Sunday, September 20, 2009

Reverse H&S Objective for SPX Was Met on 9/17/2009

SGS is Long.
RTS One Year Return = 36.3% (9/5/2008 to Present)
RTS Total Return = 65.6% (11/07/2007 to Present)

Current RTS Pofrtfolio
............................ Past RTS Portfolios

By all measures including market breath, advance/decline line, new highs and new lows, we're seeing a very strong bull run that very likely will continue well into next year. Government stimulus combined with Fed's relaxed monetary policy are working. Market has picked up momentum and is steaming forward with financial and technology sectors leading the way.

S&P500 Index (SPX) reached mid 1070's last Thursday and satisfied the objective of a Reverse Head and Shoulders (H&S) chart formation which was confirmed for the first time on 5/1/2009, and re-confirmed as SPX strongly bounced off of its neck line on 7/13/2009. Please see chart below:

After achieving the Reverse H&S objective ("Target" line on chart above), the chances of Market going into a short period of rest and possibly a minor sell off is substantially more than continuing to move higher, especially as we're entering a seasonably weak period of the year.

Per my plan, I cashed out at SPX >= 1074 last Thursday. I'm currently formulating a plan to open long positions. I'm going to wait for a few days and see if there's a pull back and how steep it might get. More on that later.

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